India’s wholesale price inflation (WPI) increased to 1.84% in September 2024, up from 1.31% in August, driven by a sharp rise in food prices, according to data from the Ministry of Commerce and Industry. This surge was primarily due to a spike in vegetable prices, with onion, potato, and tomato costs rising by 78.8%, 78.1%, and 74.5%, respectively. The food price inflation rose to 11.53% from 3.11% in August, marking a two-year high. Despite deceleration in other categories such as fuel and manufactured products, food price inflation led the overall increase.
Food Prices Surge
Vegetables saw the sharpest price hikes in 14 months, pushing food inflation to 9.47%. Potatoes, onions, and tomatoes were key drivers, while fruits and pulses saw moderate easing but remained elevated at 12.2% and 13%, respectively.
Fuel and Manufactured Goods
Fuel and power prices dropped by 4.05%, with petrol and diesel falling 7.47% and 5.33%. Manufactured products, which account for 64.2% of the index, saw a minor deceleration, with inflation at 1%.
Economic Impact
The spike in wholesale inflation coincides with the contraction in India’s Index of Industrial Production (IIP) and comes after the Reserve Bank of India maintained its policy rates. Experts suggest some moderation in food inflation could occur with the Kharif harvest, but weather conditions may keep vegetable prices elevated for now.
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